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Ensure TINs for all the clients

The National Board of Revenue (NBR) Chairman Md Mosharraf Hossain Bhuiyan urged the bourses and the insurers on Tuesday to ensure that all of their clients must possess Taxpayer’s Identification Number (TIN).

He said people, interested to have insurance policies or buy shares, must have TIN.

“Usually, people, who have savings, come to buy insurance policies. So, they must be registered with the tax department.”

The NBR chief said these at a pre-budget meeting with the Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), Bangladesh Leasing and Finance Companies Association (BLFCA), Bangladesh Insurance Association (BIA), Bangladesh Merchant Bankers Association (BMBA), and Bangladesh Insurance Surveyors Association. It was held at NBR conference room.

He held out an assurance that the NBR will not take any decision in the upcoming budget that might affect the country’s capital market.

He said the number of TIN holders has recently increased to 4.0 million, but the country’s tax-GDP ratio still remains low, as many of the TIN holders avoid submission of tax returns.

In the pre-budget proposals, the DSE Managing Director K A M Majedur Rahman demanded reduction of source tax to 0.015 per cent from the existing 0.05 per cent on transaction of securities to help the bourses continue with their development activities.

He also sought 100 per cent tax exemption on income of the stock exchanges for five years. Currently, the exchanges are enjoying a reduced rate of tax on their income.

Both the DSE and the CSE sought full waiver of source tax on share transactions of the Small and Medium Enterprises (SME), who will come under the proposed SME platform.

They also sought tax benefit to make the bond market vibrant, and increase in tax-free ceiling for dividend income up to Tk 0.1 million from the existing Tk 25,000.

Ghulam Faruque, General Manager of the CSE, proposed that the NBR widen the tax gap between listed and non-listed companies from the existing 10 per cent.

He also sought tax waiver on dividend income of companies listed in the SME platform, and withdrawal of tax on all types of bond trading to develop the country’s corporate bond market.

He said the definition of permanent establishment (PE) in the income tax law is not consistent with the Double Taxation Avoidance (DTA) agreement, causing harassment to the investors.

Some investors from India and Sri Lanka do not have PE here, and as per DTA they have to pay tax in their countries, he added.

IDLC head of group corporate affairs and taxation and group company secretary Mohammad Jobair Rahman proposed to cut the corporate tax rates to 25 per cent for listed companies and 35 per cent for non-listed ones.

He also sought full tax waiver on Corporate Social Responsibility (CSR) expenditures, raise in tax-free ceiling for individual taxpayers to Tk 3,50,000 from the existing Tk 2,50,000, and simplification of the investment rebate provision in the income tax law.

Currently, the government allows 10 per cent tax rebate, under certain conditions, on the amount spent as CSR by corporate taxpayers.

Responding to the proposals, the NBR member (tax policy) Kanon Kumar Roy said they will simplify the investment rebate provision in the upcoming budget to facilitate the taxpayers.

The BIA director and Chief Executive Officer (CEO) of Rupali Insurance Company P K Roy demanded a waiver of 15 per cent VAT on reinsurance commission that remained in place after withdrawal of VAT on agents’ commission.

He said there is 15 per cent VAT on non-life insurance companies, while life insurance companies are exempted from VAT.

He also demanded withdrawal of the VAT and 5.0 per cent gain tax on insurance holders.

Shohel Ahmed of Bangladesh Insurance Surveyors Association said they have to pay 15 per cent advance tax, which should be withdrawn.

The BMBA proposed to change the discriminatory tax treatment towards them, as they are still paying 37.5 per cent tax.

SOURCE:FE

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